# Opening a B&M Tobacco Shop



## mikesimsr (Jun 15, 2010)

It may sound crazy, but my son and I are considering opening a small (at first!) B&M tobacco shop in a riverfront community in our area specializing in fine cigars and tobacco products. The town has a population of about 10K and is close (45 miles) from the StL metro area. Located along the Missouri river it is an upscale community having a lot of shops, restaurants and wineries. There is no competitive retailers within about a 40 mile radius.

Does anyone in the group have any experience in a small retail operation, and can anyone recommend cigar wholesalers to contact? I have a fair amount of experience in retail... just not stogies.

Many Thanks!


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## Mante (Dec 25, 2009)

mikesimsr said:


> It may sound crazy, but my son and I are considering opening a small (at first!) B&M tobacco shop in a riverfront community in our area specializing in fine cigars and tobacco products. The town has a population of about 10K and is close (45 miles) from the StL metro area. Located along the Missouri river it is an upscale community having a lot of shops, restaurants and wineries. There is no competitive retailers within about a 40 mile radius.
> 
> Does anyone in the group have any experience in a small retail operation, and can anyone recommend cigar wholesalers to contact? I have a fair amount of experience in retail... just not stogies.
> 
> Many Thanks!


First of all, if you decide to go ahead with this venture, Good luck to you & yours as I wish everyone in small business success. :nod:

Sounds on simple terms like you have a good market but the population is way to small to support a B&M unless you have massive tourist traffic. That being said, if you have a good market of smokers in your area you may survive if you offer almost everything the B&M's 40 miles away do, at a competitive price point.

Believe it or not, I and many others will happily drive the 40Miles to walk into a well stocked humidor if they are friendly & offer me service. You are also competing with the online market.

Another way of supplementing your business is to offer high grade accompaniments like Coffee beans & Chocolate. Like I said, best of luck but these are purely my own thoughts as I have been weighing up a similar idea with a much larger population base.


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## Jenady (Nov 23, 2009)

Mike I assume you are talking about Washington. I will volunteer to be your first customer if you decide to take the plunge. I will even volunteer to help with the heavy lifting to get a place ready to go.

I have yet to find a good B&M in the St. Louis area.


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## mikesimsr (Jun 15, 2010)

Jenady said:


> Mike I assume you are talking about Washington. I will volunteer to be your first customer if you decide to take the plunge. I will even volunteer to help with the heavy lifting to get a place ready to go.
> 
> I have yet to find a good B&M in the St. Louis area.


Jim:

Yup! It's Washington. I realize it is a small town but it has a lot of potential. On the riverfront there are many boutique shops that do a fair amount of business, locals and tourist. We are envisioning a small shop that would include a smoking lounge with the appropriate atmosphere... i.e hardwood floor, well-stocked bookshelves and magazines, rugs, fireplace, leather chairs... you get the idea. We are also considering offering some local wines and perhaps brandies as an accompaniment. Mu son likes the idea of a big screen TV to use in major sporting events, but I'm not sold on that idea yet. Of course we would offer fine pipe tobaccos and some upscale cigarettes. Oh yeah, we gotta have a cigar store Indian.

We could do "cigar events" where we feature a specific brand and offer folks a chance to try 'em out. I kinda have an idea of something similar to a Tupperware party for guys (and gals so inclined) 'cept we could call it a "Pufferware" party.

Lot's of possibilities, but we need to put pencil to paper and see if it's enconomically feasible.

I would certainly appreciate anyone's input, negative or positive.

Mike


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## ghe-cl (Apr 9, 2005)

I would strongly recommend you make your first step a friendly tobacco shop owner in your state to discuss the procedures for getting the necessary federal and state licensing to be a tobacco dealer. It can be an extremely cumbersome and time-consuming process. You also need to find out exactly what your locality does and does not allow with regard to sales of alcohol -- setbacks, with or without tobacco sales, zoning, etc. Dealing with cigar manufacturers is often no walk in the park, either, as you'll find if you talk to a number of shop owners. All in all, I think most cigar store owners would tell you that setting up the shop -- the TV, furniture, etc. -- is the simplest part.


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## Magnate (Nov 27, 2009)

I also wish you the best of luck with your endeavors! I decided to do some simplified market analysis based on what little I know of your area (your post) and some stuff I found on the internet to support my research.

According to Cancer.org (ACS :: Cigar Smoking) 4.8 billion cigars & cigarillos were consumed in the US in 2007.

According to the census (Population Estimates), there were 301 million Americans at the time.

Assuming your population base is statistically similar to the entire US, we're looking at an average consumption of 16 (15.94) cigars/cigarillos per person in your population. And a total of 717,608 cigars/cigarillos.

Unfortunately, the statistic includes cigarillos... and swishers... and white owls... etc... but let's see what you'd have to do at 16 per person to make money. And while you don't have a real B&M in 40 miles, you do have gas stations competing for these 16 smokes per person in this statistic.

Let's try some scenarios - even unrealistic ones.

You sell 50% of the all cigars/cigarillos consumed at an average price of $5 per stick. Revenue = $1.8 million

You sell 25% of the all cigars/cigarillos consumed at an average price of $5 per stick. Revenue = $900k

You sell 25% of the all cigars/cigarillos consumed at an average price of $3 per stick. Revenue = $540k

You sell 20% of the all cigars/cigarillos consumed at an average price of $2.5 per stick. Revenue = $360k*

I think saying that you will sell 1 out of every 5 cigars/cigarillos in your area is an over-estimate. I also think saying the average per-stick price of $2.5 is high. Many people on this forum like to stick to the $2 - $3 range, which means they average $2.50... mix in a pile of cigarillos and backwoods at far less than $1 per stick, and your average really gets hit. I don't you'll have enough Opus sales to put a hug increase on that.

So, let's look at a generous $360k in revenue. And it looks like your cigar tax is 10% of wholesale cost: Cigarette and Other Tobacco Product Tax Rates

Well, if you have a 100% mark-up on your cigars, that means the invoice was $180k and that you'd pay 18k in tax for a total of $198k in inventory costs. Leaving you $162k to run the store.

I have no idea what your commercial real estate prices are, but you certainly need a store-front and you want it to be nice, though small is ok. I'm guessing $1500 a month or $18k per year. Now we have $144k to run the store with...

I assume you and your son can run the operate the business without an employee. I also assume you'd like (or more) to take home at least $3000 per month, or $36k per year. To do this, you'll pay out 72k in salaries, $3000 to Missouri income tax, $9400 in Income tax, and $11k in social security and medicare tax. So about $85000 in salary costs... now you have $59k left. That's using a very generous model... And here's some more bills!

Health Insurance 
Property Insurance 
Liability Insurance 
Loan Interest (
Tax filing fees
Utilities
Lost/damaged stock
Office supplies
etc, etc, etc...

I know you'll also have some revenue from selling humidors and cutters and so on... but I think the estimates used were overly generous already.

On top of that, we have to look at traffic. To make the $360k scenario *you need to sell 394 cigars/cigarillos per day and be open 365 days a year. Open 10 hours per day, you need to sell about 40 cigars an hour - that's 1 5-pack every 7.5 minutes for 10 hours straight for 365 days per year. If it takes you 2 minutes to ring up a sale, you have 5.5 minutes between each customer. I know you'll have 2 people working, but you also have to be open 70 hours per week, so you aren't both going to be working all the time. So, with that 5.5 minutes you can: help the customer decide, stock shelves, do the bookkeeping, do inventory, order more cigars, plan advertising campaigns, talk to your accountant or attorney on the phone, eat lunch, etc. etc. etc...

This sounds like a TON of work for very little money all tied up with a bunch of risk in a volatile market.

Thanks for helping me figure out that I don't want to do this... But good luck to you sir! I hope all this stuff was helpful. I'm a small business owner, and one of the businesses I run is a small business formation and consulting company (the other is risk management consulting, ie: insurance) - my work is usually more organized, but it's Sunday morning and I'm working for free LOL! Happy to help a BOTL every time. Shoot me a PM if you have questions you think I can help with.


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## asmartbull (Aug 16, 2009)

Chris
Nice work !!!!!!!

I ran similar numbers when thinking of opening a shop
in the Ocean City area of Maryland.  *I am still thinking* *about it,,,,,*
In my old life I used to do "Business Valuations" as one of the financial
services I provided and the numbers can be depressing.
Years ago I made the statement to a buddy in the business...

"Opening a cigar shop in these days is like starting a 
typewriter company as the computer age was kicking in."


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## Evonnida (Jun 1, 2010)

I'll be your 2nd customer! I would think a key would be to carry a wide variety of brands and maybe even samplers. Those are a good way to get "new" smokers into the hobby. A few of the B&M's around me have kind of a "stodgy" reputation and only carry the well established, older smokes. Just a thought though.


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## saigon68 (Apr 16, 2009)

A fellow here in Pearl River, New York opened a B&M with all the fixins': flat panel tv's, nice leather arm chairs & leather couches etc... He opened this past Spring & was closed down in May. Notice on his door stated that he had been closed for operating as a cigar lounge. The town apparently sent an undercover police officer into the store and the rest is history. How in God's name does one become a small business owner with this kind of oppressive government intrusion on everything? Sooner or later cigar/cigarette smokers will have a bounty on their heads. FWIW.


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## asmartbull (Aug 16, 2009)

asmartbull said:


> Chris
> Nice work !!!!!!!
> 
> I ran similar numbers when thinking of opening a shop
> ...


I went back and took a look at some notes I made in past valuations and
my potential endeavors.

1. If possible own the realestate, which must have potential to be operated as something else.

2. Open air seating or access to outdoors,,,Can double or triple square footage...also many will drive further for that kind of environment

3. If there isn't a business in the area like your,,why not. Get to know the folks at the local chamber of commerce. Usually the secretaries can tell you everything that has happenned in the area for the past 10 yrs

4. Make others businesses in the area, satellites for you. A local shop
keeps small hummis in several Mom and Pop grocery stores with his name on them. He takes care of them and gives them a % of what he makes.

Hope this helps...


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## SmoknTaz (Jun 18, 2008)

mikesimsr said:


> It may sound crazy, but my son and I are considering opening a small (at first!) B&M tobacco shop in a riverfront . . .


Good luck to you and your son Mike.



Magnate said:


> I also wish you the best of luck with your endeavors! I decided to do some simplified market analysis . . .


Very helpful Chris! Reps sent your way my friend. :tu


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## BTcigars (Jun 30, 2009)

mikesimsr said:


> Jim:
> 
> Yup! It's Washington. I realize it is a small town but it has a lot of potential. On the riverfront there are many boutique shops that do a fair amount of business, locals and tourist. We are envisioning a small shop that would include a smoking lounge with the appropriate atmosphere... i.e hardwood floor, well-stocked bookshelves and magazines, rugs, fireplace, leather chairs... you get the idea. We are also considering offering some local wines and perhaps brandies as an accompaniment. Mu son likes the idea of a big screen TV to use in major sporting events, but I'm not sold on that idea yet. Of course we would offer fine pipe tobaccos and some upscale cigarettes. Oh yeah, we gotta have a cigar store Indian.
> 
> ...


The TV is a excellent idea. At my B&M we were watching the NBA playoffs. The laker fans were in the lounge and the Celtics fans were in the front of the store. It was something to hear one room cheer while the other groaned and vice versa....good times!


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## Wild 7EVEN (Nov 7, 2009)

BTcigars said:


> The TV is a excellent idea. At my B&M we were watching the NBA playoffs. The laker fans were in the lounge and the Celtics fans were in the front of the store. It was something to hear one room cheer while the other groaned and vice versa....good times!


I agree, the tv is a great idea, at our local lounge for the superbowl, seating was filled up by noon. and a large part of the crowd were not regulars, or never been there before, so it definately a huge draw.

Also, I like the idea of selling coffee and chocolate and wine. I think it would bring a larger customer base, and appeal to tourists and passersby.

Good luck with your venture, and its good to see some people with business knowledge able to chip in some advice too.

Maybe you could pm some of the retailers, and manufacturers in our meet the retailer section for a little help too?


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## Jenady (Nov 23, 2009)

Having suffered the B&M shortage in our area I would love to see two things. First, a decent assortment of cigars is crucial. Second, there needs to be a comfortable place to relax and smoke. One of our "local" B&M's has a large smoking room. I can not say much about it because I could not see across the room. I don't think they had any ventilation. I did not hang around.

You are getting a lot of great feedback in this thread. Good luck.


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## TonyBrooklyn (Jan 28, 2010)

mikesimsr said:


> It may sound crazy, but my son and I are considering opening a small (at first!) B&M tobacco shop in a riverfront community in our area specializing in fine cigars and tobacco products. The town has a population of about 10K and is close (45 miles) from the StL metro area. Located along the Missouri river it is an upscale community having a lot of shops, restaurants and wineries. There is no competitive retailers within about a 40 mile radius.
> 
> Does anyone in the group have any experience in a small retail operation, and can anyone recommend cigar wholesalers to contact? I have a fair amount of experience in retail... just not stogies.
> 
> Many Thanks!


Two of your biggest hurdles are the internet and tobacco taxes.
As has already been said unless you have a large walk buy tourist market in this economic climate its going to be rough.
I wish you luck.:cowboyic9:


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## JDC20 (Feb 11, 2004)

mikesimsr said:


> It may sound crazy, but my son and I are considering opening a small (at first!) B&M tobacco shop in a riverfront community in our area specializing in fine cigars and tobacco products. The town has a population of about 10K and is close (45 miles) from the StL metro area. Located along the Missouri river it is an upscale community having a lot of shops, restaurants and wineries. There is no competitive retailers within about a 40 mile radius.
> 
> Does anyone in the group have any experience in a small retail operation, and can anyone recommend cigar wholesalers to contact? I have a fair amount of experience in retail... just not stogies.
> 
> Many Thanks!


Got some questions for you, any way to get a hold of you?


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## mikesimjr (Jun 20, 2010)

Hey I think it it an awesome idea although I might be a bit biased...


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## mikesimsr (Jun 15, 2010)

JDC20 said:


> Got some questions for you, any way to get a hold of you?


I can't post my email addy yet <sigh>, I only have three posts so I'm still a newbie. If you post your email addy though, I will reply to you.

Mike


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## ongreystreet (Nov 3, 2008)

I will agree with the posts saying get to know your local businesses, laws, codes, and all taxes. Also the industry is tricky in so many ways, one obvious example is choosing which products you want and which ones you'll get. Like going to a pizza shop and wanting a coke and a mountain dew, ain't gonna happen because MD is a pepsi product, this happens a lot in the tobacco industry.

My advice from a consumer standpoint, is that it seems to me B&M have two paths these days:

1) Shop with variety of smokes, decent prices, small sitting area, lots of accessories, and other junk (cards, flasks, knives, etc)

2) Shop with lounge, better smokes, higher prices, lounge, lockers, events, late night hours, and liquor (if you can)

I have a shop around the way from me that sells a majority of it's stock at double MSRP, but they have great events, a great lounge, liquor, and stay open past midnight on most weekends, and for things such as MNF, and pay per view events. They know you can get a certain cigar for $2 on the web, but make a killing selling them for $8-10 on their shop.


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## TonyBrooklyn (Jan 28, 2010)

mikesimsr said:


> I can't post my email addy yet <sigh>, I only have three posts so I'm still a newbie. If you post your email addy though, I will reply to you.
> 
> Mike


You can P.M each other as well.:bump:


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## ke4mcl (Jun 17, 2010)

3 of us looked at opening a shop here in miami. of course, the location i thought was sweet got snapped up. there's a good saturation of shops here in miami fl.

i wont get into financials but will share what i learned.

ambiance is everything. warm lighting is inviting, fluorescent white sucks. cigar music (jazz, lounge, bigband) makes for a good mood. lots of small speakers are better than a few big ones. the sound will be evenly distributed and not obnoxiously loud in one area. comfy dark colored leather or pleather furniture is a good idea. your furniture will get ashed so light colors or fabrics are a bad idea.

air filtration is a must. best idea i saw on this though is a home built extractor. the shop uses what looks like a central a/c vent array as extractors that dump outside. it works fairly well at keeping the shop smoke free.

parking. if parking is a chore, non exixtent, or metered you're customer base will suffer. downtown like areas are the exception. cigar shops in suburban areas with lousy parking suffer.

the "club" membership is a money maker. you cant sell booze without a liquor license but at least here in FL what shops do is offer a membership at a low price and that allows "members" to get booze at the shop. a glass of spirits and a cigar in hand means a customer will stay put and give you a chance to interest them in new product.

most shops here do a "club night" where they bring in latin bands, charge a cover at the door, and give away booze. seems to work for them as those events are common here.

how to get free wall decor. some local artist will chomp at the bit to have a place to show their work. you get a fresh flow of wall art and maybe a commission out of it. just be clear on that fact its a cigar shop.

places like Cuban Crafters will gladly make and brand cigars from you. its amusing to hear all this banter back and forth from people who arent too impressed with certain CC lines yet if they only knew how many companies are actually custom lines from CC.

hope some of this info is useful. im in miami so what works here, may not work there.


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## mikesimsr (Jun 15, 2010)

TonyBrooklyn said:


> You can P.M each other as well.:bump:


 OK, 'cept I've searched the site from top to bottom and can't find any reference to PM'ing another member... how do I do that?

Mike


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## Mante (Dec 25, 2009)

mikesimsr said:


> OK, 'cept I've searched the site from top to bottom and can't find any reference to PM'ing another member... how do I do that?
> 
> Mike


Dont know what the post requirement is but if your allowed just click on thier username and a drop down box will appear. (Seems you need more posts as I cant PM you)


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## mikesimsr (Jun 15, 2010)

Tashaz said:


> Dont know what the post requirement is but if your allowed just click on thier username and a drop down box will appear. (Seems you need more posts as I cant PM you)


 Yeah, I figgered that's how you did it, but I couldn't get it to work.... <sigh> guess I'll just have to wait 'til I'm off "probation"

:usa:


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## pomorider (Nov 14, 2009)

I am not sure what your local law is like, but it can be tricky for advertising.


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## jarrod (Oct 22, 2006)

Mike,
There are alot of factors to consider when looking into a B&M such as those mentioned above. It can be done however. 

I have a B&M in Oklahoma City. We are one of 2 larger shops here (meaning we carry about 200 facings). We average around $800K in sales/yr and around 130K net profit/yr . If you run that number, we net on about 15% of total sales. With that being said, a shop doing 360K would only net 54K/yr. One factor to consider is i pay myself minimal throghout the year on a salary and the divide profits yearly. 

Im not saying it wouldnt work, but my numbers are based on a population of over 500,000 to achieve these numbers. We have 2 large shops and about 4 smaller shops in OKC, all who have survived for more than 5 yrs and some for around 30yrs. If your looking for a relaxed occupation and arent loooking to get rich, it may work


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## PadillaGuy (Feb 4, 2010)

I'm in a similar position, considering a cigar oriented business...
I'll be on this thread like white on rice!

PG


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## bouncintiga (Feb 3, 2010)

very cool idea, I wish you the best of luck with the venture.


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## Amlique (Sep 9, 2009)

I'm afraid I'd smoke too much of my inventory.


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## mikesimsr (Jun 15, 2010)

jarrod said:


> Mike,
> There are alot of factors to consider when looking into a B&M such as those mentioned above. It can be done however.
> 
> I have a B&M in Oklahoma City. We are one of 2 larger shops here (meaning we carry about 200 facings). We average around $800K in sales/yr and around 130K net profit/yr . If you run that number, we net on about 15% of total sales. With that being said, a shop doing 360K would only net 54K/yr. One factor to consider is i pay myself minimal throghout the year on a salary and the divide profits yearly.
> ...


Jarrod:

Many thankls for the info and advice. There are still MANY things to consider. We are not too far from a large metro are (StL) and I am hopeful that in time, a quality shop would attract a clientele that wouldn't object to the drive. The personal service by knowledable people would be paramount. A "huge" profit is not the issue, a comfortable living is however. I am hopeful that once I get thru my "probation" period here I can PM you with some more specific questions... would you mind?

Mike


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## jarrod (Oct 22, 2006)

I wouldnt mind at all. I have been running the numbers on opening a new shop so i know what your going through.. your best bet is to realistically run the numbers and have an unbiased analysis. Do you frequent shops in the STL area? If so, get to know some of the customer base and see where they are commuting from. I know we have guys who drive upwards of an hour to see us.. Heck i even have a 50 min drive to the shop.


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## quo155 (Aug 10, 2010)

Thanks for the question...and thank you for the answers as well. I am seriously considering opening a Tobacco shop & Lounge in the Tyler, Texas area. We are right in the middle of DFW and Shreveport, LA...about 85 miles from each, with a population of around 125k in Tyler alone, about 165k in the immediate area. Could any of (who is giving good advice and market analysis) PM me so I may get you some more info on the area so you may do the same for me...if you are willing, of course? 

BTW, I am thankful that you are looking into this for your area. I wish you the best of luck, and as someone else here said...I will be on this thread like "white on rice"!

Any input would be helpful, positive and negative!


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## Matt1951 (Apr 25, 2010)

I think you would do better opening a store closer to St Louis. Even if you have a little drive every day. There is a guy who owns the B&M in Brownsburg Indiana I frequent - Smokers Choice. He is opening his fifth cigar/tobacco store in the suburban westside of Indianapolis, and he doesn't even smoke. Being just outside a major city, you will have prosperous customers come to your store. 
Next, I would find a successful store owner - maybe here online - and ask for secrets of success, probably shared offline.


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## mikesimsr (Jun 15, 2010)

JDC, I got your PM, but can't reply until I have 15 posts. This is 14 so I will reply to you shortly. Thanks for the offer.

MIke


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## Evonnida (Jun 1, 2010)

Any news on the shop?


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## Fia (Jul 13, 2010)

Just to put in my .02. Among the other suggestions, here are a few more:

1. Dont be afraid of inexpensive/bundled cigars. Premium cigars are a given but there is definitely a market segment for that even in a tourist area.

2. Diversify your product mix. Dont just sell cigars! Pipe tobacco and especially RYO will be big! With the prices on cigarettes these days, RYO is a very cost effective way to smoke. I know there is some stigma with cigarettes but it will make you money that will help you stay in business to sell premium cigars.

3. Speaking of cigarettes..you might want to consider carrying a few facings of cigarettes. I dont know what the rules will be where you are at but here it is hard for retailers who carry cigarettes not to be told by the big boys how many facings, p.o.p., etc that they need to have. If you can get by without all that BS, go with a few known brands. If not, then I would suggest American Spirit cigarettes. We have a local B&M here in Hawaii that doesnt sell any form of cigarettes and turns away 10-15 customers every day who ask for cigarettes. They arent even in a real tourist area either. Not only are they losing those sales but they are losing extra sales in lighters, etc. Even sales of those .99 bics adds up. However, we have another retailer here who does sell American Spirit. When people come in asking for cigarettes, they tell them they only carry AS. They estimate that they will make a sale 1 out of 3 times. Thats better than 0 out of 3 times!

4. Consider offering beverages. Alcohol might be a big headache but coffee, espresso, etc could be good. Even stocking a refrigerator with some soda especially high quality or boutique type sodas will move.

5. Having a smoking lounge is great but make sure the square footage you commit to it is justified in sales. How much money is being made from people sitting there? You will need a bigger store to have a smoking lounge. Will the additional lease costs be justified?

6. If going with a lounge, you MUST have ventilation. If a customer walks into a smoke cloud, chances are you wont see many again. We have a retailer here who had a very small shop with enough seating for about 3-4 people to smoke. Needless to say it would get smokey really easily. They decided to stop allowing smoking in their store and their sales went up almost 50%. Many women now shop in there to buy gifts for the male in their lives.

7. Build relationships with your business neighbors. Do events, collaborations with each other so that they can drive business to your store.

8. Is there a hotel market in your area? If so, consider hooking up with the concierges in the hotels and giving them small gift certificates say 5.00 to your store. Dont use coupons, they dont work. But 5.00 free dollars will drive customers to your store. The concierge scores points for hooking up a guest and you score by getting traffic. Not to mention its not really costing you 5.00 but really 2.50 since cigars are a keystone product. Consider it a small loss leader. You will likely make additional sales when the customer shows up to get his free 5.00. Who ever spends just 5.00 in a cigar shop anyway?

I have been speaking about 2 retailers in some of my examples. The one that is diversified, etc just opened their 2nd store. The other one that doesnt sell cigarettes, doesnt have ventilation, etc is probably going out of business in the near future even though they have just as good of a high visibility/high traffic location as the other store and even better parking.

Good luck and feel free to PM if you have other questions.


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## kjb5221 (Sep 10, 2012)

Re: quo155... I know I'm a little late to this post, but I am a new member and I was wondering if you have put together plans for a shop in Tyler yet? Tyler and Longview seem like great places to open a shop. I would like to hear what the status of your plans and help in anyway, because I intend to own a shop myself and have 4 years of Cigar lounge management experience from south Louisiana.


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## quo155 (Aug 10, 2010)

@ kjb5221...thanks for the question, but no...sadly, I no longer intend on opening up a shop here in East Texas. I thought long and hard, but with the rules and regulations only getting stricter and with it getting harder to make money in the business...I decided to pass...at least for now.

However, I may have put all plans on the shelf...but I did not shred them. I don't see one in my future right now...but you never know!

Since I will not be moving forward on this, I am in the process of getting into a different type of business...the "Gun" business. I am awaiting my Federal Firearms License as I received from word from the ATF that my license has been issued and should come in the mail this week. So, with my "ties" to the ATF...I may still look into combining something, if even possible or feasible...one day...

What are your plans?


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## Irish Cannon (Feb 25, 2011)

Be friendly, warm and welcoming. That's the best advice I could give. If my buddy didn't work at my B&M, I wouldn't ever go.

I give them business for all my singles purchases. If I want to try something, I'll go in there and give it a whirl. I usually buy 1-2 sticks when I go, sometimes three, at an avg cost of $7/stick. So they stick me for about ~$20/wk. 

I live in a small area with lots of tourism. I'd assume they have about 10 regs each day, the rest being guys that stock up 1-2x/wk, and then the others are tourists. The shop has been around for about 15yrs.


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## kjb5221 (Sep 10, 2012)

Re: quo155... I totally understand how you feel about the thin margins. I am willing to sacrifice for a while to do what I love. I am in the planning phase (financial and organizational) to open my own shop. Then once I am fully operational and secure in my investment, I want to expand to other markets in La and Tx.

Many people think it can't work because they have never seen a shop done right. A good shop will create new smokers and impart the passion of luxury tobacco to its patrons. With great service, exceptional products, knowledgeable staff, fun events, and inviting atmosphere, I believe a b&m can compete with online and discount stores all day! Have you seen how Outlaw Cigars works? They have created a whole market based off their events. The store is a revolutionary take on traditional smoke shops.


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## nikesupremedunk (Jun 29, 2012)

I think you have to be established for a long time to stay open in a day like this. Very hard to open a new store as per reasons given above. 

Good luck if you go through with your plan.


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## The_Chosen_One (Aug 18, 2012)

A bit off topic but I'd be curious to know the industry markup on cigars if anyone knows? It was guessed at 100% earlier in this thread, but I'd be surprised if that's correct, seems like it'd have to be more. I couldn't imagine B&M's staying in business if they had to spend more than 35% of sales on cigars, although I'm no expert by any means.


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## Old Stogies Cigars (Mar 4, 2012)

I will be officially opening my new cigar shop tomorrow... or at least a "soft opening" of the shop.
It is located in the same space as my current barber shop, being separated with old barn board wall to resemble an old store front, even have an original barn door. I built my own walk in humidor, and have done all the work myself in getting it ready.
I will be selling ONLY cigars, and cigar related items... no cigarettes, pipes, RYO's etc.... I didn't want frankly the "riff raff" that it would bring into my shops. I am not wanting high school kids, and bums in buying cigs and rolling papers.

In Illinois the tax on cigars jumped from 18% prior to July 1st to 36%!!! So it really hits the bottom line on markup of the products. I have a few wholesalers whom I have accounts set up, and a couple of direct cigar manufactures that I am dealing with. I have it set up that the Illinois tax is paid to them on shipment, so that I didn't have to jump all kinds of tax hoops to get open here.

As I said, the location is in my current man's old style barber shop, and my customers are looking forward to the addition. Not all, but many, and since our city has 2 tobacco stores that sell everything, I focused entirely on the premium cigar market. Prices to begin will be $1.50 to $20.00 per stick. Some bundles, and sample packs I will be putting together. 

ALL profit will be reinvested into the cigar shop, as the barber shop is doing well and can pay all the overhead, (rent, lights, gas, phone, etc...)

I have built this shop on a shoestring budget, and I have no thoughts of grandiose sales ... but I do expect I will do well, and as I really believe, "nothing ventured, nothing gained" and I certainly couldn't wait for the government to build it for me. I am doing it my way, and if it fails or wins, it's on ME, not anyone else. I am looking to my future as well, as I am now 60 years old, and I have two rare types of Muscular Dystrophy, and my time standing behind a barbers chair may be getting shorter, so this is my personal Plan B for my future years.


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## CigarShop (Oct 16, 2012)

Larry:

I do wish you well!! Being an owner myself just take it one day at a time. If you ever need to talk PM me and I'll be there for you.


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## Old Stogies Cigars (Mar 4, 2012)

CigarShop said:


> Larry:
> 
> I do wish you well!! Being an owner myself just take it one day at a time. If you ever need to talk PM me and I'll be there for you.


Thanks Pete !!


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## PadillaGuy (Feb 4, 2010)

Just my two cents worth but it may be short sighted
to exclude pipes and RYO. I can appreciate wanting to keep
kids out, but classifying legal age potential customers as
"bums" seems a bit harsh. I've been to a great many shops
that carry high end cigarettes such as Nat Sherman Naturals
that attract a different "class" of shopper. Plus, the additional
revenue stream can be great. Of course every shop cards buyers
appearing under 30, right?

Just thoughts,
Marty K.


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## MarkC (Jul 4, 2009)

If you're afraid of pipes attracting who I _think_ you're afraid of them attracting, don't worry. The stuff isn't $10 an ounce anymore; nobody is going to buy a full-sized pipe for that purpose these days...


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## Old Stogies Cigars (Mar 4, 2012)

MarkC said:


> If you're afraid of pipes attracting who I _think_ you're afraid of them attracting, don't worry. The stuff isn't $10 an ounce anymore; nobody is going to buy a full-sized pipe for that purpose these days...


 it's in line with the rolling papers... I am from the 60's, so I remember some of it LOL, my issues are that I am right downtown, but only 3 blocks in either direction from 2 high schools, and I don't want a shop where kids come in for rolling papers.
@Marty K. my comment regarding bums is that I see many walk or riding their bikes by my barber shop all day. They sadly are the ones I am referring to, I am not an a-hole, I just have women and children come into my barber shop and I really would prefer that they not be subjected to these patrons coming in to buy RYO items. I will at this time sacrifice the sales to my competitors who sell liquor and everything else.... when the day comes to stop cutting hair, then I will certainly look at adding more products. I may do it gradually now, but I want to take my time and keep control of the two shops/one location. Thanks for the advice though ---- it is noted, and I will consider your viewpoint.
Larry


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## capttrips (Jun 25, 2012)

61350 said:


> it's in line with the rolling papers... I am from the 60's, so I remember some of it LOL, my issues are that I am right downtown, but only 3 blocks in either direction from 2 high schools, and I don't want a shop where kids come in for rolling papers.
> @Marty K. my comment regarding bums is that I see many walk or riding their bikes by my barber shop all day. They sadly are the ones I am referring to, I am not an a-hole, I just have women and children come into my barber shop and I really would prefer that they not be subjected to these patrons coming in to buy RYO items. I will at this time sacrifice the sales to my competitors who sell liquor and everything else.... when the day comes to stop cutting hair, then I will certainly look at adding more products. I may do it gradually now, but I want to take my time and keep control of the two shops/one location. Thanks for the advice though ---- it is noted, and I will consider your viewpoint.
> Larry


Good luck in your endeavor. I hope to open a shop next year. And, I happen to agree with your opinions. The shop I frequent is in a business park and I can't tell you how many times a day they get transients looking for "one hitters", hooka pipes, etc. it can really become a distraction for the owners.


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## asmartbull (Aug 16, 2009)

I was visiting a friend who opened a small shop in MD.
His favorite saying today is " If you want to make a little money, start off with a lot."

Many of the larger cigar shops in my area now sell coffee and other items to make up for the narrow margins
on cigars.


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## gcbright (Dec 1, 2012)

61350 said:


> I will be officially opening my new cigar shop tomorrow... or at least a "soft opening" of the shop.


How did the first day go? There is nothing like the first day of being open with a new shop (I know, shop inside a shop.). It seems you spend forever planning, getting inventory ready, and then comes day one. I hope yours went well!


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## PadillaGuy (Feb 4, 2010)

capttrips said:


> Good luck in your endeavor. I hope to open a shop next year. And, I happen to agree with your opinions. The shop I frequent is in a business park and I can't tell you how many times a day they get transients looking for "one hitters", hooka pipes, etc. it can really become a distraction for the owners.


Again, not to upset, but lets not forget Drew Estate
manufactures shisha or "hookah" tobacco. My point
is that in this anti-tobacco world we should evaluate
each items position in our inventories and weigh the
sales potential against the perceived "bad
element" they could attract.


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## Pesqueraa (Feb 25, 2013)

Hello, 

Does anyone have a Business plan I can use. My girlfriend and I want to open a Cigar shop possibly a lounge. I'm hoping maybe someone can help me with information.


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## capttrips (Jun 25, 2012)

Pesqueraa said:


> Hello,
> 
> Does anyone have a Business plan I can use. My girlfriend and I want to open a Cigar shop possibly a lounge. I'm hoping maybe someone can help me with information.


First things first. I live in Northern Virginia and I can already think of 5 cigar lounges in Melbourne. That doesn't include surrounding areas. What makes you special? What's going to make people come to your shop or leave their current shop to join yours? I'm opening a shop this summer and have just gone through this. My best suggestion is go to Amazon.com and purchase Cigar Store Business Plan Bundle. It's $40. Any other questions PM me. Not trying to be a drag, but wanting a cigar shop and having a cigar shop are 2 different things.


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## gscottfuller (Nov 8, 2012)

61350 said:


> I will be officially opening my new cigar shop tomorrow... or at least a "soft opening" of the shop.
> It is located in the same space as my current barber shop, being separated with old barn board wall to resemble an old store front, even have an original barn door. I built my own walk in humidor, and have done all the work myself in getting it ready.
> I will be selling ONLY cigars, and cigar related items... no cigarettes, pipes, RYO's etc.... I didn't want frankly the "riff raff" that it would bring into my shops. I am not wanting high school kids, and bums in buying cigs and rolling papers.
> 
> ...


Larry - the very best of luck on the store opening! Keep posted on how things are going.


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## jswaykos (Oct 26, 2010)

asmartbull said:


> I was visiting a friend who opened a small shop in MD.
> His favorite saying today is " If you want to make a little money, start off with a lot."
> 
> Many of the larger cigar shops in my area now sell coffee and other items to make up for the narrow margins
> on cigars.


"If you want to be a Millionaire, start with a billion dollars and launch a new airline." - Richard Branson ... just always thought it was a funny quote that went along with the one you shared. Gotta spend money to make money, and to spend it, you gotta have it, first.


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## xenon (Dec 10, 2011)

Mike, I think a shop in washington MO would do well......I am very familliar with the surrounding area and I cannot think of another shop anywhere near there....the nearest shop might be Chesterfield or St. Peters. I was really suprised that washington did not have a cigar shop......I drove all over down town last year and could not find one.....I did find the pipe factory(very cool). I was in Union MO today and I dont think they have a shop and they don't have one in Warrenton either......Good luck and let me know if you go forward........I will make the trip 

Jim


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## quo155 (Aug 10, 2010)

Sounds like a great addition to the shop! How about some photos??? Show off that work you did brother!


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